Merrill Lynch will be able to claw back money from one of its former brokers following an award involving an outstanding promissory note balance, reports Advisor Hub.
The broker, John Lahoud, started with Merrill in 2000 and rejoined the firm in 2013 before moving his team to Rockefeller Capital Management in 2021. Merrill contended he failed to repay the promissory note balance when he departed.
An arbitration panel has now ordered Lahoud to pay the full $1.18 million that Merrill said it was owed, plus interest and around $152,000 in attorney fees and costs..
The award did not specify whether the notes were tied to bonuses earned while at Merrill or related to unvested recruiting loan balances, according to the report.
Lahoud filed a counterclaim in 2023 against Merrill’s attempt to get the loan balance back. He alleged fraudulent inducement, breach of contract, and unfair competition, while seeking unspecified damages and expungement of two customer disputes that Merrill settled in 2017 for $92,500 and $16,000.
It was noted in the report that Lahoud withdrew portions of that counterclaim two months later and indemnified Merrill for any wrongdoing for “any events” that occurred prior to 2017 as part of a stipulated agreement with the firm.
Lahoud did not respond to an emailed request for comment, nor did his lawyer, Michael Bessette of HLBS Law in Broomfield, Colorado. A Merrill spokesperson was not immediately able to provide a comment.
The attorneys at Hyman Cotter PC have handled thousands of promissory note matters for some of the largest financial services firms in the world, as well as on behalf of registered representatives. In this capacity, we have handled claims before FINRA, AAA and JAMS arbitration panels in contested and protracted hearings. If you need guidance on matters related to promissory or forgivable notes, contact us at 312-291-4600 or through our online contact form for a free consultation.
